General Motors To Continue Growth Momentum

by Trefis Team
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Trefis
GM
General Motors
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General Motors (NYSE: GM) reported its 4th quarter and full year results for Fiscal year 2018 recently. The company delivered good results on the back of higher pricing for the fiscal year. The company beats consensus expectations and reported a revenue of $147 billion and adjusted diluted EPS of $6.54 for the fiscal year 2018. The company also maintained a healthy interest margin of about 8%.

We have a price estimate of $38 per share for the company. View our interactive dashboard – Our Outlook For General Motors in FY 2019 – and modify the key assumptions to arrive at your own price estimate for the company.

 

In the Fiscal year 2018 the company had faced strong macroeconomic headwinds and also went through the transition to light-duty pickup trucks. Notwithstanding, the company reported strong results on the back of strong revenues in North America and China. In the US the company achieved record 4th year earnings while also leading the industry and pickup sales for a 5th straight year. China was in line with the previous year as macroeconomic issues are present and is expected to be similar for the next fiscal year, too. Though, the company still is quite confident about the long-term benefit from China. Internationally, GM Korea is expected to turn out a profit for the fiscal year while Brazil has improved share but overall GM South America business is a concern due to persisting macroeconomic issues.

For the Fiscal year 2019 the company is expected to continue the growth momentum on the back of its robust mix, cost efficiency, and business transformation. The company recently, as part of business transformation, announced they would outline the North America product portfolio as per changing consumer preferences and transform the workforce to the capacity required for the overall long-term success of the company. The investor call was short on further details regarding the same.

The company is restoring the Cadillac brand and is on the path to take it back to the luxury leader it once was and be GM’s lead electric brand. In 2018 the brand posted record global sales and is expected to continue growing at the same rate. The company is planning to unveil a new model approximately every six months through 2021. The company has made further progress to expand the autonomous and electric vehicles, and GM Cruise is on that path with external capital raised from Softbank and Honda partnerships.

 

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